UK loses out on trade due to poor flight links

Business leaders in some of the world's fastest-growing economies are more
likely to trade with France, Germany and Holland than Britain because of the
UK's relatively poor air connections, a survey has found.

Some 64pc of the 350 executives surveyed believed the UK would miss out on economic growth because of declining flight connections to London.Photo: GETTY

Two-thirds of directors in Brazil, China, India, South Korea and Mexico said they were more inclined to do business with Britain's major European rivals because they offered more direct flights.

Some 64pc of the 350 executives surveyed also believed the UK would miss out on economic growth because of declining flight connections to London, whose major airport Heathrow is operating at 99pc of its capacity.

The study, commissioned by the British Chambers of Commerce (BCC) and Heathrow, gives an important foreign perspective on the highly-charged political debate over Britain's aviation policy – or lack of one.

It heated up last week with news that the Government, having blocked a third runway at Heathrow, would review a potential £50bn new airport in the Thames Estuary.

John Longworth, BCC's director-general, said: "While businesses welcome the ambition displayed by the Government's recent announcement on a possible four-runway airport in the Thames Estuary, this so far unfunded project will take 20 years to deliver. More has to be done in the meantime to solve the UK's capacity crunch, for example by building a third runway at Heathrow."

Willie Walsh, chief executive of British Airways-owner International Airlines Group, last week said he doubted the new airport could be financed and vowed to keep BA at Heathrow unless the Government closed it down.

The BCC said Britain's aviation "connectivity crunch" was already costing the UK economy £1.2bn a year in lost trade, with capacity constraints preventing airlines opening new routes to growth destinations including Manila, Guangzhou, Mexico City and Jakarta.

A recent report from Frontier Economics found Heathrow offered 658 flights a year to Beijing versus 1,032 from Frankfurt and 964 from Paris Charles de Gaulle. Equally, it said that, while 370,000 transfer passengers fly to Beijing via European hub airports, only 27,000 of them fly via Heathrow.

Colin Matthews, chief executive of Heathrow-owner BAA, said: "The view from business leaders in emerging markets is alarming. If anyone doubted that Heathrow's capacity crunch is harming UK growth then here is the evidence: business leaders in the world's fastest-growing economies say they are being put off from investing in the UK because of a lack of direct flights."

Mr Longworth said the BCC was "a strong supporter of high-speed rail" but businesses could not "catch a train to China or Brazil" to promote international trade. "The UK will miss out on investment and jobs if the Government does not act now to improve capacity at our airports," he said. "Growth cannot wait. While Britain dithers, our international competitors are forging ahead."

The BCC said evidence from UK businesses is that they trade 20 times as much with countries that have daily directs flight compared to those with infrequent or no flight connections. Mr Walsh last week said "developing increased trade links with growth economies" was being "hampered by the lack of a coherent aviation policy" in Britain.